- NNPC Chief Urges Firms to Diversify
The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, has called on stakeholders in the oil and gas industry to explore other areas to boost economic diversification.
Baru spoke at the 2018 Nigerian Annual International Conference and Exhibition (NAICE) of the Society of Petroleum Engineers (SPE) Nigeria Council titled: Diversification of the Nigerian Economy: The Oil and Gas Industry as an Enabler held in Lagos. He identified the reliance on oil and gas as responsible for the economic recession experienced in the country recently.
The NNPC chief also urged the stakeholders to look for ways to create alternative funding for exploration activities in Nigeria.
He said: “This obvious lack of proactive action unfortunately exposed the country to economic shock occasioned by the global economic crises that culminated in the recession experienced recently, adding the theme was in line with the vision of the present administration of energising the national economy through robust sectoral development.”
He said with oil reserves of about 37 billion barrels and 199 trillion cubic feet of gas reserves, the country was well positioned to generate resources and accelerate developments.
According to him, once this is achieved, Nigeria should be self-sufficient in providing general services, agriculture and manufacturing, among others.
Baru stated that the reform by the NNPC has centered on third party financing for Joint Venture (JV) operations, hence there is need to look for ways to design an alternative funding for exploration activities in Nigeria.
“I extend NNPC’s gratitude to our local banks, international lenders and Schlumberger representing the local service providers, for their continued faith in Nigeria and their support in providing funding. It is quite an exciting time ahead in the Nigerian oil and gas industry. The industry is financing both the development and infrastructure through alternative funding means.
“The case in point is the Ajaokuta-Kaduna-Kano (AKK) pipeline that is being done under contractor financing with about $3billion. NNPC appreciates the cooperation of its partners and government financiers to move the industry forward. Our goal remains value delivery for all.
“So far, the financing is centred on production, I will like to see the industry to concentrate and develop innovative ways on how to finance exploration. This, I believe, will be the big take-away from this workshop as it appears this is an area that is high and tough. Can we create an industry pool that will be funding for exploration? This is a worthy idea that we should look into. I hope that deliberations in this conference will dwell on other areas that I might have left out today.
“We required an incremental annual capital funding of minimum of $7million to cover the gap and to ensure growth, it was also clear to us that we cannot leave funding gap without looking out giving the outlook of government expenditures and strategic focus.”
The Speaker, House of Representatives, Mr. Yakubu Dogara, represented by Sejus Ogun, said the country needed to pursue and develop an enabling environment that would promote transparency in the oil and gas sector.
Dogara said the Legislature had given tacit support to ensure that the industry was run in a more transparent way, adding that the House of Representatives had demonstrated the support through accelerated passage of the Petroleum Industry Governance Bill (PIGB) now waiting for presidential accent. He also assured that the remaining three other bills would receive the desired attention as the legislators were concerned and willing to provide the investment climate to drive the industry.
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, represented by Mr Johnson Awoyemi, said the industry required a robust legislation that would help in the ongoing Federal Government transformation.
Kachikwu said the Federal Executive Council (FEC) had demonstrated commitment towards strengthening the industry by giving approval to the oil and gas policies. He urged the conference to come up with suggestions and strategies that would engender transparency, reduce contracting cycle issues, bring about cost reductions and accelerate development across the value chain.
The Chairman, SPE Nigeria Council, Mr Chikezie Nwosu, called for immediate action to leverage the opportunities presented by the industry to develop other sectors. Nwosu regretted that the country had moved slowly in the quest to take advantage of the sector to fully transform the economy.
He said government should not lose focus of the opportunities in the National Gas Policy, “as gas is critical to support such agenda.”
Seplat Petroleum Pays US$564.165 Million to Federal Government in 2020
Seplat Petroleum, an indigenous Nigerian upstream exploration and production company, announced it paid a total sum of US$564.165 million to the Federal Government in 2020.
In the report on payments made available to the Nigerian Stock Exchange and seen by Investors King, Seplat Petroleum paid US$389.576 million to the Nigerian National Petroleum Corporation (NNPC) as production entitlement in 2020.
Production entitlement is the government’s share of production in the period under review from projects operated by Seplat.
This comprises crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria).
Also, Seplat paid US$130.009 million to the Department of Petroleum Resources in 2020. A breakdown of the amount showed US$111.633 million was paid as royalties while US$18.376 million was paid as fees.
Similarly, US$579,361 was paid as a fee to the Nigeria Export Supervision Scheme.
The energy company made another payment of US$17.935 million in fee for 2020.
While the Nigerian Content Development and Monitoring Board received US$4.826 million in fee from Seplat in 2020.
Seplat paid US$21.239 million in taxes to the Federal Inland Revenue Service in 2020.
Therefore, Seplat Petroleum paid a total sum of US$564.165 million to the Federal Government in the 2020 financial year. See the details below.
FIRS Sets N5.9 Trillion Revenue Target for 2021
FIRS to Generate N5.9 Trillion Revenue in 2021
Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.
Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.
According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.
However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.
He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.”
Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.
“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.
Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom
The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.
Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.
The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.
The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).
Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.
Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.
“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.
The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.
The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.
This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.
The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.
Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.
Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.
OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.
The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.
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